- Prelims: Current events of international importance, COP, IPCC, G20, GCF etc
- Mains GS Paper II: Bilateral, regional and global grouping and agreements involving India or affecting India’s interests, Important international institutions etc
ARTICLE HIGHLIGHTS
- The issues relating to climate finance are likely to be prominent in the Conference of the Parties (COP 28) meeting (November 30–December 12), in Dubai.
INSIGHTS ON THE ISSUE
Context
Climate Finance:
- It refers to local, national, or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.
- The UNFCCC, Kyoto Protocol, and the Paris Agreement call for financial assistance from Parties with more financial resources (Developed Countries) to those that are less endowed and more vulnerable (Developing Countries).
Stand of Developed countries on financing:
- Climate Financing: commitment to reaching the target of $100 billion in climate finance a year for developing countries is close to being met.
- Private finance: Mobilization of private finance as the critical component of climate finance
- Providing finance to developing countries is the operationalisation of the principle of the Common but Differentiated Responsibilities and Respective Capabilities.
Climate Change 2023: Synthesis Report:
- It provides the main scientific input to the global stocktake at COP.
- The report says that the current temperature increase at 1° Celsius is responsible for frequent hazardous weather that will feed into the global stocktake.
What are the challenges?
- Developed countries and climate vulnerable countries are likely to demand a ramping up of mitigation action by the developing countries
- It is likely to be countered with the demand that the developed countries have not been able to meet the mark of a mobilization of $100 billion climate finance.
- $100 billion Climate finance is inadequate in terms of the challenges faced by the developing countries in:
- switching over to a low carbon development path
- climate resilient
Climate finance:
● The developed countries are required in mandatory terms to provide financial resources to developing country parties.
● Under Article 9 of the Paris Agreement on Climate Change: It is mandatory for the developed countries to provide in their Biennial Update Reports (BUR), information relating to the financial resources which they have provided and
○ The projected levels of public financial resources to be provided to developing country parties.
● At the Copenhagen Change Conference in 2009: The developed countries made the commitment to mobilize $100 billion per year by 2020.
● The developed countries are required, in accordance with the decision accompanying the Paris Agreement
○ To collectively mobilize $100 billion through 2025
○ Before a new collective quantified goal (NCQG) ‘from a floor of $100 billion per year is to be set at the end of 2024’.
● 26th United Nations Climate Change conference in Glasgow in 2021, the developed countries have been able to mobilize only a total of $79.6(seventy nine point six) billion.
Nationally determined contributions (NDCs):
- The Paris Agreement is based on the self-determined efforts of all the parties inscribed in the nationally determined contributions (NDCs)
- It contains the mitigation efforts to be made by a party for the next five years.
- Entire NDCs project a picture of overshooting the 5°C(one point five) temperature goal.
- Needs of countries in the Global South expressed in their NDCs, the amount quantified for the first time touches close to $6 trillion until 2030.
India and NDCs:
- Its third BUR says that its financial needs derived from its NDCs for adaptation and mitigation purposes for 2015-30 are $206 billion and $834 billion, respectively.
- Most of the financial needs are required in transitioning towards
- low-carbon
- cleaner energy systems from traditional systems
- It will not be funded by the designated financial mechanisms of the United Nations Framework Convention on Climate Change (UNFCCC).
- India’s demand for a just transition at COP27 as ‘3.6 million people in 159 districts in India
- They are entrenched in the fossil fuel economy through direct or indirect jobs related to the coal mining and power sector’.
Issues related to climate financing:
- The developed countries are mandatorily required to provide financial resources to developing country parties
- But there is no agreed approach among developed countries to share the burden of this goal.
- One analysis suggests that the United States provided just 5% of its fair share in 2020.
- Without any mandatory formula for collecting money, it is difficult to predict how the said money or the NCQG for climate finance will be mobilized.
- Neither the UNFCCC nor the Paris Agreement mention the criterion for mobilization.
- The mobilization is done with the help of a replenishment process.
The Global Environment Facility:
- UNFCCC-designated funding agency providing grant and concessional loan to developing countries, is replenished every four years.
Green Climate Fund (GCF):
- Provided by the developed countries to mobilize finance.
- The GCF, set up to administer a portion of the $100 billion for developing country parties to switch over to low-emissions and climate resilient development path
Issues with the funds:
- In the second pledging conference, only 25 countries out of 37 developed countries met in Bonn, pledging to contribute $3(nine point three) billion in new contributions.
- GCF includes voluntary contributions by nine developing countries.
- More contributions in the GCF serve the purpose of counting international public climate finance more easily
- The ambiguity on what counts as international public climate finance.
Way Forward
- Strong political will, perceived urgency and enlightened self-interest of the elite Global North were writ large in the case of a perceived collapse of global public good (global financial stability) in 2009-10
- The G-20 governments quickly responded to the global financial crisis
- These factors are missing when it comes to the necessary climate finance transfers from developed to developing countries to safeguard another global common — the atmosphere.
- Further growth: Both public and private finance segments would need to grow a further 21%-22% to meet the 2023 low-end estimate of $101 billion.
- Grant-based and concessional international public climate finance: It will continue to play the key role in addressing the needs and the priorities of developing countries, especially when challenges are growing due to extreme weather, food and energy crises.
QUESTION FOR PRACTICE
Discuss global warming and mention its effects on the global climate. Explain the control measures to bring down the level of greenhouse gasses which cause global warming, in the light of the Kyoto Protocol, 1997.(UPSC 2022) (200 WORDS, 10 MARKS)
